BOSTON - Pieris Pharmaceuticals, Inc. (NASDAQ:PIRS) announced a strategic shift to focus on potential milestones from its immuno-oncology partnerships, implementing cost-saving measures to extend its cash runway into 2027. The company's Board of Directors, after a comprehensive review, has decided to retain the potential for future milestone and royalty payments rather than pursuing other strategic options.
The Boston-based biotech firm has ceased all research and development activities, with a complete discontinuation expected by mid-2024. This decision is part of a broader plan that includes workforce reductions affecting additional employees and the executive leadership team, slated for the second quarter. The Board of Directors will also be reduced to align with the company's ongoing operations.
Pieris has partnered with Pfizer (NYSE:PFE), Boston Pharmaceuticals, and Servier on its 4-1BB bispecific Mabcalin protein franchise. All partnered programs are fully funded by the respective partners, and Pieris may receive up to $20 million upon the first patient dosed in phase 2 trials for three of its clinical-stage assets. Further milestones could reach up to $275 million, with additional commercial milestones potentially exceeding $500 million. If approved, Pieris is also eligible for royalties from commercial sales.
President and CEO Stephen Yoder highlighted the self-funded nature of the new strategy, noting the potential to capture future milestones and royalties. The company may also explore milestone and royalty monetization agreements to possibly accelerate cash distributions to shareholders.
Since July 2023, Pieris has taken steps to reduce operational costs, including scaling back its workforce and terminating its lease obligation in Germany. The company has also sold laboratory and office equipment to improve its cash position.
As of December 31, 2023, Pieris reported having $26.4 million in cash and investments. It does not anticipate future financing needs to achieve the near-term milestone potential of its partnered programs. The company may consider cash dividends when milestone or other payments are received, provided there is sufficient cash to meet its objectives.
The company continues to seek potential acquirers for its remaining preclinical and clinical assets. While Pieris remains eligible for milestone and royalty payments, there is no guarantee of receiving such payments or the timing thereof, nor is there assurance of any potential strategic transactions occurring.
This news is based on a press release statement from Pieris Pharmaceuticals.
InvestingPro Insights
Pieris Pharmaceuticals, Inc. (NASDAQ:PIRS) has recently announced a strategic pivot towards capitalizing on the potential of its immuno-oncology partnerships. In light of this development, it's crucial to consider the company's financial health and market performance, as these factors can significantly impact its ability to execute its new strategy effectively.
InvestingPro Data indicates Pieris holds a market capitalization of $18.58 million, which is reflective of the company's current valuation in the market. Despite a notable revenue growth of 66.17% over the last twelve months as of Q3 2023, the company's gross profit margin stands at -7.12%, highlighting challenges in translating top-line growth into profitability. Additionally, the stock has experienced a sharp decline, with a 1-year price total return of -85.59% as of the latest data point.
When it comes to InvestingPro Tips, two key insights stand out. Firstly, Pieris holds more cash than debt on its balance sheet, which is a positive indicator of financial stability and may provide some comfort to investors concerned about the company's ability to sustain operations. On the other hand, analysts do not anticipate the company will be profitable this year, which is a critical consideration for investors looking at the long-term earnings potential of Pieris.
For readers interested in a deeper analysis, there are additional InvestingPro Tips available that could shed more light on Pieris' financial standing and market performance. In total, there are 11 tips listed on InvestingPro, offering a comprehensive perspective on the company's prospects.
To explore these insights further and to gain access to the full suite of InvestingPro Tips, readers can visit https://www.investing.com/pro/PIRS. Remember, using the coupon code PRONEWS24 will secure an additional 10% off a yearly or biyearly Pro and Pro+ subscription, enabling investors to make more informed decisions with access to real-time data and expert analysis.
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